Tag Archives: ftth

Open access fiber drives down consumer broadband prices in New Zealand


A national project to build fiber-to-the-premise infrastructure and offer it to any Internet service provider on a wholesale basis began in New Zealand in 2011, with an initial goal of reaching 75% of Kiwi homes and businesses. According to a study done by International Data Corporation, a research firm, and sponsored by Spark, the biggest NZ reseller of FTTP service, the build out has reached about 65% of NZ premises, and the goal is now to reach 87% by 2022.

A total of 92 resellers are using the wholesale network to offer retail service. The resulting competition resulted in a drastic drop in retail prices, according to the report

New Zealand telecommunication’s structural separation and national broadband plan have created new constructs and market dynamics. The [Ultra Fast Broadband] initiative has commoditised fibre in New Zealand. Consumer fibre plan prices have plummeted from averaging over NZ$200 per month in 2013 to around NZ$85 per month as at February 2018.

In U.S. dollars, that’s a drop from $144 (or more) per month in 2013 to $61 per month now.

The report questions whether the current level of competition can be sustained. But it also shows that there’s a big gap between the a long tail of small competitors and the handful of market leaders who, presumably, have staying power. Five companies own 91% of subscribers, and all have complementary businesses that share much of the operating costs, including marketing and subscriber management. One is Spark, which is the legacy telephone company in New Zealand, two are mobile carriers – Vodafone and 2degrees – and two are energy companies.

Even if there’s a huge cull amongst the remaining 86 providers, the level of competition will remain high. Five companies competing to offer gigabit class Internet service for $60 or so a month is a robust market, far more competitive than the monopoly/duopoly conditions in nearly all of the U.S..

Fiber can compete, but no competition, no fiber


Fiber-to-the-home broadband service can effectively compete against cable company offerings, but copper-based DSL service can’t. That’s a lesson that’s coming into sharp focus as telcos report 2017 financial results.

Verizon backed away from legacy telephone service, selling its California systems to Frontier among other things, but hung on to its FiOS business, which is concentrated in the northeastern U.S. As a result, Frontier is bleeding DSL subscribers (although it’s doing better where it offers FTTH service), while Verizon’s share of broadband subscribers in its FiOS territory is climbing.

Speaking at a Morgan Stanley conference, Matt Ellis, Verizon’s chief financial officer, said gains from its fiber-based broadband service even offsets declines in its video business…

We’re above 40% penetration on broadband where we have FiOS deployed…So if a customer decides to cut the cord on the video piece, I’m not getting the video revenue anymore, but I also have a significant cost component that goes away too and when those customers decide to cut the cord and rely on [the Internet] for their video entertainment, the quality of their broadband connection becomes even more important.

Verizon and AT&T posted overall broadband subscriber gains in the first nine months of 2017 – the only two major telcos to do so – despite losing a combined 172,000 DSL subs. Fiber to the home service was the reason.

As subscribers continue to dump DSL in favor of DOCSIS-based service from cable companies, telcos will invest in upgrading copper plant and/or replacing it with fiber. But only where there’s 1. competitive pressure to do so and 2. a sufficiently affluent target market. The absence of both is why AT&T and Frontier are heading rapidly in the opposite direction in rural California. Where there’s no cable service and effective competition is lacking, they are shutting down their DSL business and installing low capacity fixed wireless systems.

Where there’s no competition, there’s no need to invest in competitive service.

San Francisco willing to pay for citywide FTTP, but not saying how much


The City and County of San Francisco wants a short list of companies willing to build an open access, wholesale fiber-to-the-premise system that reaches all homes and businesses. It posted a request for qualifications (RFQ) yesterday, asking potential partners to make their pitches, with the idea of winnowing the responses down to a handful that will go on to a second and final round of proposals later this year.

Unlike Los Angeles, San Francisco is making an upfront offer to subsidise at least some of the costs. In return, it wants a big say in how the system is run, including setting terms to sell capacity on the system to third party “retail service providers” (RSPs) that will, in turn, serve end users…

The City desires a state-of-the-art FTTP network capable of delivering a minimum of a gigabit to consumer premises, and scalable to higher speeds over time as the market develops. The network should include fully fiber connections to the premises that provides ubiquitous data, voice, video services to all communities in San Francisco and offers a choice of competitive private RSPs. The City also seeks to achieve construction and operations efficiencies wherever possible and to build and operate the network at the lowest possible cost.

A study released last October estimated the total construction tab at $1.9 billion or, put another way, a “connection fee” of $51 per home per month and $73 per business per month, which would also cover some operating costs.

The RFQ doesn’t put it on the table, though. The City is offering undefined lump sum payments based on construction milestones and ongoing service fees, but the wholesale partner will also have to depend on income from RSPs and other telecoms companies that want to lease capacity. It’ll share that revenue with the City and, according to the RFQ, is “expected to assume the full performance risk” of the project and “share in City’s financial risk including revenue risk, market risk and uptake risk”.

Responses are due 26 March 2018.

City and County of San Francisco request for qualifications for citywide fiber to the premises network, lit fiber and wi-fi services, 31 January 2018.

The potential for ubiquitous, open fiber-to-the-premises in San Francisco, CTC Technology & Energy and IMG Rebel, 17 October 2017.

City and County of San Francisco, financial analysis of options for a municipal fiber optic network for citywide Internet access, 15 March 2016.

Link to the City’s web page, which provides access to all documents and updates.

$351 billion U.S. consumer tech 2018 forecast built on broadband


Source: Consumer Technology Association, 7 January 2018. Click for the full presentation.

The Consumer Technology Association (CTA) predicts that connectivity, particularly via mobile networks, will fuel industry growth, with total U.S. retail sales hitting $351 billion in 2018, up 3.9% from last year. .

Traditional consumer hardware categories are flat or declining, while connected devices and services are booming – for example “smart speakers”, which are tied to artificially intelligent, voice recognition services such as Amazon’s Alexa, are predicted to hit $3.8 billion in 2018, a 93% increase.

This forecast was released yesterday at CES, which used to be the Consumer Electronics Show and which is produced by CTA, which used to be the Consumer Electronics Association. Increasingly, the industry is defined by software, content and networks, and not by gadgets and gizmos. Hence the rebranding from electronics to technology. That shift is also showing up in revenue figures.

The $351 billion predicted U.S. industry total includes $20 billion in music and video streaming services, a 35% jump from 2017. If you back out that revenue, the predicted growth in retail revenue in 2018 will only be 2.5%. Hardware growth is probably even lower. Only a few, top line category forecasts were released, and some – arguably all – are a mix of digital bits and physical products.

All eleven of the categories that were broken out rely on broadband connections. Without connectivity, speakers and homes aren’t smart and virtual reality is virtually nothing. So it’s no surprise that CTA analysts spent more time talking about 5G mobile networks than televisions, or even smartphones.

“We’re in the connected era”, said Steve Koenig, senior director of research for CTA. “We understand the importance of connectivity, not just to to the industry but to the global economy”.

Many of the really cool things to come that Koenig talked about will depend on the fast, low latency bandwidth that 5G networks will deliver in urban areas. Without it, the promise of technologies like self driving cars, augmented reality or robotics won’t be fully realised. But it’s important to remember that residential wireline networks will continue to do the unglamorous heavy lifting in a connected, consumer technology-enabled world.

Koenig predicts that five years from now, nearly 800 million “consumer tech connected devices” will be sold annually in the U.S. For that to happen, we need modern networks. Of every kind.

AT&T still fails at FTTH, but slowly figures out how to make it work


AT&T hasn’t fully embraced fiber to the home service yet. At least not judging by my experience setting it up in a newly built, fully fibered apartment complex. But they are making progress.

Originally, AT&T only offered homes in FTTH islands the same service packages that they offered to surrounding copper customers. That still might be going on in single family home developments or in redlined neighborhoods, but they’ve developed genuine fiber packages of up to a symmetrical gigabit for multi-dwelling units. Unfortunately, their customer service reps and installers aren’t all onboard.

Since this wasn’t for my primary residence, I wanted AT&T’s cheapest, bare bones Internet service, in this case, 50 Mbps download and 10 Mbps upload with no contract, at $50 per month and a $99 installation fee, as their website led me to believe. No surprise, AT&T made it hard for me to buy it. As it turned out, they didn’t even sell it.

No contract service isn’t available online, even when you try to order it via an online chat. The call center reps are nearly as clueless. After the obligatory up sell attempt, The first rep I spoke with took my order and told me it would cost $40 per month. That set off alarm bells, since that’s the 12-month contract price. I asked her if that’s the no-contract price and got an uh-hum in return.

Anytime a call center rep answers with uh-hum, it means I don’t know but I’d like you to assume I’m saying yes.

I asked to speak to a supervisor and, after some argument, finally got one. He confirmed what I thought: the $40 rate came with a contract and no-contract service was $50 for 50 Mbps, symmetrical as it turned out. Done deal. A installation appointment was set.

I could expend a couple thousand words describing what came next. The highlight was a surprise early morning service call from an installer who tried to tell me the optical network terminal he had was the WiFi equipped modem I’d ordered. When I pointed out he was installing it in a metal cabinet without an ethernet connection, he just said “it’s pretty powerful”. Right.

Six truck rolls later, I had Internet.

A week after that, I had a bill for $70. It took several phone calls, each more unpleasant for all involved than the last, to establish that 50 Mbps symmetrical service is $70 on a no contract basis, and all $50 gets you is 5 Mbps symmetrical.

Which is what I now have. And it works, although how it will perform when the complex finally fills up is an open question. AT&T’s FTTH service is a good product. They just need to learn how to sell and install it.

Google Fiber gives up on video, and maybe fiber too


Google Fiber is throwing in towel on video service. In a blog post, the company announced that it won’t be offering a cable-like lineup of television channels along with gigabit Internet service in Louisville and San Antonio…

We’re trying something new in our next two Fiber cities. When we begin serving customers in Louisville and San Antonio, we’ll focus on providing superfast Internet – and the endless content possibilities that creates – without the traditional TV add on.

If you’ve been reading the business news lately, you know that more and more people are moving away from traditional methods of viewing television content. Customers today want to control what, where, when, and how they get content. They want to do it their way, and we want to help them.

Two years ago, a top Google Fiber executive, Milo Medin, said “if you don’t offer a good TV service your ability to compete with incumbents that bundle Internet and TV together is significantly impaired”.

So, what changed? A couple of things.

It’s certainly true that the availability of unbundled video content available directly via the Internet has grown considerably in the past two years, and there’s no sign of it slowing down. Declaring linear video subscriptions to be a legacy business and letting cable and satellite companies wrestle over its (slowly) dwindling remains simplifies Google Fiber’s operations and business model, and eliminates a lot of headaches. That alone could be a good trade for the potential subscribers they might lose as a result.

But something else changed, too. In the past two years, Google Fiber has become, in effect, Google Fiber and Wireless. Technically, it’s easy to add a hundred or two TV channels to a fiber-based service, but impossible on a terrestrial wireless system that has orders of magnitude less total bandwidth available. Google’s announcement should also be treated as another indicator that in the future the company is going to be even more selective about where it builds fiber to the home infrastructure. If it even installs any more fiber at all.

Legislative games put $2.2 million Riverside FTTH project in peril


Red zone is where federal subsidies pay for slow broadband service.

Anza Electric Cooperative is giving another push to its proposal for a $2.2 million California Advanced Services Fund (CASF) grant to pay for expanding its fiber to the home system in rural Riverside County.

It sweetened its application yesterday by promising a low cost tier of service – $25 per month for symmetrical 10 Mbps service – to households that are eligible for any one of a long list of public assistance programs. Combined with offers of free service to a short list of non profit groups and discounted service to others, and low cost (sometimes no cost) computers, it’s a way to raise the profile of its application a bit, and perhaps move it through the California Public Utilities Commission’s vetting process more quickly.

That’s important because if a commission vote doesn’t come soon, the Anza project might be killed by assembly bill 1665, which is awaiting a vote in the California senate.

AB 1665 would change the rules for CASF, which is the state’s primary broadband infrastructure subsidy program. The bill would make it effectively impossible to award CASF grants for high speed fiber projects where an incumbent telco – in this case, Frontier Communications – might eventually use federal subsidies to pay for minimal upgrades to low speed, 1990s vintage DSL technology.

Because it had to get around legislative deadlines, AB 1665 was declared to be an urgency bill, which means it takes effect the moment it’s signed by the governor. If it makes it that far, it’ll go into effect no later than mid-October.

This sudden death clause was added to the bill by its nominal author, assemblyman Eduardo Garcia, who turned over writing responsibilities to telco and cable lobbyists early in the process. He’s a democrat and, ironically, represents Riverside County, although not the part that includes the project area. Anza is in the assembly district next door, which is represented by republican Randy Voepel, who sent a letter of support for the project, but has otherwise been missing in action as AB 1665 slithers through through the legislature.

In the past, the CPUC has taken the position that what counts are the rules that are in effect when the application is filed. But that’s not firm ground in any case, and for the Anza project, it’s very thin ice. Frontier has been aggressively litigious – at times, egregious – in opposing state subsidised broadband upgrades. Except, of course, when it’s getting the subsidies. And attitudes towards competitive projects are hardening at the CPUC. If AB 1665 becomes law before the CPUC votes on whether or not to fund it, the outlook for the Anza project is very bleak.

California upgrades Altice’s fiber, but the favor isn’t returned


California didn’t make the cut for Altice’s fiber to the home upgrades, but it has upgraded one town here to gigabit-level cable modem service. In a press release praising its own FTTH ambitions, Altice was careful to point out that only three contiguous northeastern states are on its fiber list. States which also happen to be where it faces competition from Verizon’s FiOS FTTH service…

Design and construction have commenced for several hundred thousand homes concurrently in areas of New York, New Jersey and Connecticut. The Company is on track to reach one million homes constructed by year end 2018.

That’s also a region that Altice picked up when it purchased Cablevision last year, in its second, and by far its largest, acquisition of U.S. cable systems. Its first was Suddenlink, a much smaller operator that has a few scattered outposts in California. Although Altice left the door open to upgrading Suddenlink systems when it first unveiled its FTTH plans, so far it hasn’t walked through it.

What it has done in Suddenlink’s territory is boost the capacity of some of its hybrid fiber-cable systems. So far, the press release says, Altice has upgraded “more than 60 percent of its Suddenlink footprint” to gigabit levels, presumably via DOCSIS 3.1 technology.

That 60 percent only includes one Californian community, Mammoth Lakes. What’s different about it? Altice doesn’t say, but I’ll make a guess. Mammoth Lakes is in Mono County, and Digital 395 runs right through it. It’s an open access fiber network that stretches 500 miles from Reno to Barstow along the eastern slope of the Sierra Nevada, paid for by grants from the California Advanced Services fund and the federal stimulus program. Long before it was a gleam in Altice’s eye, Suddenlink hooked into it and boosted service speeds in Mammoth Lakes by a factor of ten, at no extra cost to its subscribers.

Fast and cheap middle mile access makes a difference.

G.fast isn’t so gee whiz compared to fiber, Verizon exec says


G.fast technology, which in theory allows telcos to push gigabit speeds over existing copper wire, isn’t a good substitute for fiber upgrades, according to Verizon’s director of network planning. Vincent O’Byrne, quoted in an article by Sean Buckley in FierceTelecom, said that even in multi-tenant office buildings or apartments, it’s more cost effective to install fiber all the way to the customer, than it is to bring fiber in or near a building and then use G.fast to close the gap…

“It’s a bit more expensive to put the single family unit fiber connections out there, but we have the same kind of service as the rest of the network,” O’Byrne said. “We also found that the trouble report rate is less on the fiber all the way to the living unit.”

“At Verizon we were finding the trouble reports on the copper were two to three times more than when we had fiber to the living unit,” O’Byrne said. “For a long time, the copper plant in the Verizon network was not as good as it was in some locations so if we went to G.fast it would be low volume and we would have the same issues five years down the road.”

Of course, if Verizon maintained its copper plant, instead of letting it rot on the poles and then selling it off, as it did in California, some of these issues might not have come up. But it’s true that copper circuits carrying G.fast traffic need to be relatively pristine in order to work over any real distance. If a lot of work is needed, there’s not much of a cost difference between refurbishing copper and replacing it with fiber.

Rapid and constant changes in technology are also a problem. O’Byrne said that as equipment hits end-of-life, it can’t always be replaced with compatible gear, and the mix of different generations of technology can be costly to maintain and difficult to support.

Rural Michigan voters approve higher taxes for faster broadband


Voters in a Michigan town overwhelmingly approved adding about $22 a month to their tax bills, in order to pay for the construction costs of a municipal fiber to the home system. Lyndon Township is in a rural area of southern Michigan, where broadband service is described by a local news site as “almost entirely lacking” (h/t to MuniNetworks.org for the pointer). According to a story in the Chelsea Update by Lisa Allmendinger, the vote was 66% to 34% in favor of the property tax hike

Based on currently available taxable valuation data for Lyndon Township, the average cost per property owner for this construction will be about $21.92 per month. Estimated costs for basic internet access will be between $35-45 per month. This internet service will provide a basic speed of 100Mb, with no caps on data usage, with 1Gb (gigabit) speeds available for about $60-70 per month.

The average combined cost of the millage for infrastructure and monthly fee for basic service will be between $57-67 per month.

On the face of it, this muni FTTH project is credible. It’s small town – about 900 homes – and a small system, which means even a small disconnect between the business plan and reality can have big consequences for taxpayers. But the $22 per month tax hit is in the same ballpark as estimates elsewhere, including in San Francisco and for the Utopia project in Utah. It’s estimated to be a $7 million project, in other words right around $8,000 per household, which is a realistic figure for a rural build. If there are cost overruns or take rates don’t match projections, taxes might go up, but probably not by a huge amount.

It’s an honest approach to municipal FTTH financing. Instead of pie-in-the-sky promises, a realistic price was presented to voters and they agreed to pay it.